Now that the FOMC has announced its intentions, it has to sit back and wait to see if it can actually do anything. This is the direct consequence of using the federal funds rate as the primary target, as it is a dead market that nobody really uses anymore. The only reason the Fed is still leaning on federal funds [...]
Now that the FOMC has done it, we get to hear about how it was surely the “right” time for it. Unlike September, conditions are supposedly an order of magnitude more settled. That has given the policymaking economists the green light to make sure they start the normalization process before “overheating” becomes the central concern. With August a fading memory, [...]
It is perhaps the perfect situational irony of this economic age, with the FOMC set to end its “emergency” policies by raising rates for the first time in a decade the very same day that the very same outfit, the Federal Reserve’s staff, just declared that the past cycle may have long since peaked. The monetary policy “exit” is a [...]
As the monetary world prepares for the monetary equivalent of D-Day, it bears reminiscing about the true lack of confidence that permeates away from the direct public front of the central bank. Yellen has declared that monetary policy will be “data dependent” but that isn’t truly the case. Any such data will be filtered into the Fed’s models, which are [...]
This chart from our strategic macro research partner shows the incredible length of stimulus. Has the current, prolonged period of unchanged FED policy rate of 0% conditioned investors to think this level of interest rates is the new normal? The FOMC looks to be ready to embark on a period of raising interest rates. If 10 yr bond yields [...]
Following up from yesterday’s nod toward monetary policy irrationality, the “relevant” markets today continue to profess their concurrence with it all categorized in that manner. I’m not just critiquing the readings of economists at the Fed and their conditional responses, I’m stating unequivocally that the entire affair, and all in it, has been reduced to pure farce. That starts squarely [...]
The federal funds rate holds no relevance to anything actually useful and meaningful. That has been the case for some time, though pinning down exactly when federal funds became irrelevant is a bit of chore (I personally view it when altering Regulation M in 1990 created a regulatory par with eurodollars). Even the FOMC admits how actual finance has passed [...]
To say that the “dollar” is a mess to begin the week is to state the obvious. The condition left at Friday’s close has persisted, with commodities and such being sold heavily from the outset. Japan’s renewed “recession” (I use quotes only in the conventional sense, given that the Japanese economy never truly left) hasn’t helped in that regard, but [...]
You couldn’t really call it a calming effect, as rates never truly settled down rather simply becoming less obviously meddlesome. At the September FOMC, the “dovish” sentiment that was apparently received brought LIBOR rates off their devastatingly devilish perch that had been building from all the way back in early July. As if it needed to be restated, that surge [...]
While the stock market had one of its best months in years, it was, like the jobs report, uncorroborated by almost everything else. The junk bond bubble, in particular, stands in sharp and stark refutation of whatever stocks might be incorporating, especially if that might be based upon assumptions of Yellen’s re-found backbone. Do or do not, corporate junk remains [...]
Stay In Touch